Business News

Dow rise sets fresh high despite report

The Dow pushed to fresh highs on Wednesday one day after notching an all-time record, even as the Federal Reserve said economic growth continued at a dull pace.

The Dow Jones Industrial Average rose 42.47 points (0.30 per cent) to 14,296.24, a new all-time high.

The broad-based S&P 500 edged up 1.67 (0.11 per cent) to 1541.46, while the tech-rich Nasdaq Composite Index declined 1.77 (0.05 per cent) to 3222.37.

The market gains came despite a mixed report on US economic conditions from the Federal Reserve.

Although the Fed’s Beige Book showed “modest to moderate” economic expansion, it noted concerns about the impact of new tax hikes on consumer spending.

Michael James, managing director of equity trading at Wedbush Morgan Securities, said many investors continued to have doubts given the uncertainty in Europe and high unemployment in the US. But momentum was pushing stocks higher.

“The market resilience and the index going higher are pulling people into the market that don’t want to be buying,” James said. “People are forced to be buying chasing the performance.”

Among Dow components, the biggest gainers included Bank of America (up 3.2 per cent), Alcoa (up 2.6 per cent) and Cisco Systems (up 2.3 per cent).

Hewlett-Packard, also a Dow component, rose 2.8 per cent on reports of fresh shareholder pressure to revamp the computer maker’s board and possibly top management.

Another Dow member, Exxon Mobil, dropped 0.1 per cent after signalling 2013 production would drop one per cent from the 2012 level.

American Eagle Outfitters plummeted 10.1 per cent after signalling that first-quarter earnings would be lower than last year’s levels. The company cited “macroeconomic headwinds and unfavourable weather” as drags on consumer spending.

Bond prices fell. The yield on the 10-year Treasury rose to 1.94 per cent from 1.89 per cent late on Tuesday, while the yield on the 30-year roe to 3.15 per cent from 3.10 per cent. Bond prices and yields move inversely.